Saudi Arabia's PIF boosts investment in US stocks to $12.8bn

The sovereign wealth fund invested more than $3bn in three US gaming companies

The value of Saudi Arabia's Public Investment Fund's Uber investment, its biggest US stock holding, rose to $3.7bn at the end of the fourth quarter, from $2.66bn. Reuters AP

Saudi Arabia’s Public Investment Fund boosted its investments in US stocks to about $12.8 billion at the end of the fourth quarter of 2020, including buying more than $3bn worth of stocks in three gaming companies.

The sovereign wealth fund's US equities portfolio climbed more than 80 per cent from $7.05bn at the end of the third quarter of last year, according US regulatory filings by the fund on Tuesday.

The PIF purchased 14.96 million shares in California-based video game publisher Activision worth $1.39bn in the three months to the end of December, making it the company’s sixth-largest shareholder.

It also invested $1.1bn and $826 million in game developer Electronic Arts and Take-Two Interactive, buying 7.4 million and 3.9 million shares in two firms respectively, making it the sixth-largest and fifth-largest holder in the companies, according to the US Securities and Exchange Commission filing. Last month, Electronic Arts won a bidding contest with Take-Two for the UK’s Codemasters, which it is buying for $1.2bn.

Shares of all three game developers have risen since the end of the third quarter. Activision has climbed about 27 per cent, partly helped by upbeat earnings. Electronic Arts is up almost 12 per cent and the New York-based holding company Take-Two has climbed about 18 per cent since September 30, according to Bloomberg data.

The value of the fund's stake in Uber, the biggest US equities holding in its portfolio, rose to $3.7bn at the end of the fourth quarter, from $2.66bn in third quarter, as the ride-hailing company's shares rose nearly 40 per cent since the end of September.

Other holdings of the fund include 50.8 million shares in US cruise liner operator Carnival Corporation worth $1.1bn. The value of the PIF's stake increased from $776.1m at the end of the third quarter, as shares of the company – which was hit hard by the coronavirus crisis – climbed on the roll out of Covid-19 vaccines that bode well for global tourism.

The fund is rapidly increasing its portfolio of international investments. It is a cornerstone investor in SoftBank’s $100bn Vision Fund along with Abu Dhabi's Mubadala Investment Company. The two sovereign funds have invested $83bn out of $98.6bn of committed capital into the Vision Fund that invests in technology companies globally.

In November, PIF also took a 2.04 per cent stake worth $1.3bn in Reliance Retail Ventures, India’s largest retail chain controlled by Mukesh Ambani.

Saudi Arabia, the Arab world’s biggest economy, is radically transforming its economy under its Vision 2030 programme to reduce its reliance on hydrocarbon revenue and develop new income streams. The Public Investment Fund is at the heart of the kingdom’s economic diversification ambitions.

Last month, the fund launched a five-year strategy to more than double its assets to $1.07 trillion and contribute $320bn to the kingdom's non-oil gross domestic product.

The fund, which also holds stakes in major companies and financial institutions in Saudi Arabia, plans to invest a minimum of $40bn a year into the domestic economy until 2025 and help create 1.8 million jobs.